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S&P 500 futures up 0.4%, Stoxx up 0.2%

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Dollar drifts, oil rebounds after four sessions of decline

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Chip names fall in US premarket

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Euro and sterling steady against dollar

(Updates ahead of Wall Street open)

By Stella Qiu and Alun John

SYDNEY/LONDON, Aug 6 (Reuters) - World shares nudged

higher on Wednesday as traders bought after recent falls on soft

U.S. data and worries about tariffs, while benchmark U.S.

Treasury yields edged up from one-month lows.

Europe's broad STOXX 600 index was only marginally higher

but most Asian benchmarks rose earlier in the day, and

S&P 500 futures were up 0.2%.

The health of the U.S. economy is one major focus for

markets, and Wall Street closed lower on Tuesday after data

showed services sector activity unexpectedly flatlined in July.

That reinforced the message from Friday's soft jobs data,

which caused markets to significantly increase bets on the

Federal Reserve cutting rates in September.

"There's this tug of war going on between the more concrete

signs that we have seen that the U.S. economy is slowing and the

fact that rate cuts are coming which removes some of the

pressure on valuations," said Samy Chaar, chief economist at

Lombard Odier.

Traders are also choosing the positive message from the

current situation with U.S. tariffs.

"The market is more focused on the fact that we're not

getting maximalist tariffs, but I wonder if it isn't focusing

enough on the fact that we are still getting something moderate,

and more could be coming, pharmaceuticals for example," Chaar

said.

U.S. President Donald Trump on Tuesday said he would

announce tariffs on semiconductors and chips in the next week or

so, while the U.S. would initially impose a "small tariff" on

pharmaceutical imports before increasing it substantially in a

year or two.

He said the U.S. was close to a trade deal with China and he

would meet his Chinese counterpart Xi Jinping before the end of

the year if an agreement was struck.

However, he threatened to further raise tariffs on goods

from India over its Russian oil purchases.

Tech and semiconductors were a theme of the day regardless

of tariffs. Shares of AI server maker Super Micro fell

17.2% in premarket trading after it missed fourth-quarter

estimates, while chip firm Advanced Micro Devices ( AMD )

dropped 5.5%.

Chip foundry giant TSMC shares fell 2%.

Overall, the picture from earnings was a positive one. The

S&P500 is on track for 10% earnings per share growth in the

quarter, on HSBC's calculations, while earnings for Europe's

Stoxx 600 are up 4% year on year, on Deutsche Bank's, better

than expected.

In the government bond market, Treasury yields edged up

after a $58 billion auction of three-year notes went poorly, but

still hovered near multi-month lows. More supply will hit the

market this week, with $42 billion in 10-year notes on Wednesday

and $25 billion in 30-year bonds on Thursday.

Two-year Treasury yields rose 1 basis point to

3.73%, having risen 3.5 bps overnight, while benchmark 10-year

yields ticked up 4 bps to 4.23%.

Fed funds futures imply a 94% chance of a rate cut next

month, with at least two cuts priced in for this year, according

to the CME's FedWatch.

Investors are waiting for Trump's pick to fill a coming

vacancy on the Fed board of governors. Trump said the decision

will be made soon, while ruling out Treasury Secretary Scott

Bessent as a contender to replace current chief Jerome Powell,

whose term ends in May 2026.

With European yields rising slightly less than Treasuries',

European currencies gained. The euro was 0.3% higher at $1.1606

sterling was 0.16% higher at $1.3322.

Oil prices rose after four sessions of declines. U.S. crude

was up 1.67% to $66.24 per barrel, while Brent

was at $68.77, up 1.69%.

Trump said on Tuesday he would decide on whether to sanction

countries that purchase Russian oil after a meeting with Russian

officials scheduled for Wednesday.

Spot gold prices slipped 0.5% to $3,362 an ounce.